The Real Deal New York

Sales slump: nearly 85% of luxury listings trade at a discount

The median price cut in Q3 was $500K
December 10, 2018 01:00PM

Aalto57 at 1065 2nd Avenue

The downturn hasn’t been kind to the luxury market. And there’s new data to put it into perspective: 84 percent of high-end homes have sold at a discount.

The sales number account for the first three quarters of the year, the New York Times reported citing data from StreetEasy. The figure is up from 65 percent during the boom in 2015. The median price cut was unchanged at $500,000.

The trend is part of a broader sales slowdown. In the third quarter, residential sales in Manhattan fell 11.3 percent over the same period last year. That was the fourth consecutive quarter of declines. At the same time, the median sales price slid 4.5 percent to $1.1 million.

In light of the shift, brokers and developers have been offering more concessions and have had to get creative, the report said. At Aalto57, a luxury rental tower in Sutton Place, residents can attend a yoga class in a luxury three-bedroom apartment. The class was hosted by startup hOM, which holds pop-up fitness classes in unoccupied office and apartment spaces. The apartment was listed in November for $12,589 a month, and is offering two months of free rent.

Meanwhile, the Durst Organization started handling requests from movie and TV producers to film in its buildings about five years ago, the report said. The company said it has brought in “well north of seven figures a year” through the deals. A representative for Durst stressed it’s just another revenue stream for the company.

The varied approaches are all a boost to business in what’s been a buyer’s market — marked by price cuts, discounts and more days on market.

“It’s very hard to tell an owner who wants $8.5 million that it’s worth $6 million,” said Douglas Elliman’s Frances Katzen. “They don’t want to hear it, and they usually end up firing the agent.” [NYT] — Meenal Vamburkar